Should a bespoke regulatory framework be introduced for MGAs?

Over the past few years, there have been strong calls from the intermediary community for MGAs to be regulated under a separate framework from traditional insurers.

Under current regulations, the FCA guidelines apply to MGAs, brokers and all other types of insurance intermediaries in the same way.

However, bubbling concerns about this approach not reflecting the unique operational role and value of MGAs has generated backing for a bespoke regulatory framework.

Ross Dingwall, chief executive at Mission UK and Europe, noted that, as the MGA sector has grown exponentially, it is unsurprising that with “greater scale, comes greater scrutiny”.

Looking at other industries, he explained that duplication of oversight clearly harms all parties – especially the customer – and that it is essential for the industry to unite to “create better clarity and ensure incentives are aligned”.

Having long been calling for a separate regulatory framework, Corin Underwriting published data on 7 March 2025 revealing that most brokers believe that the FCA should introduce MGA-specific regulation.

Figures showed that 68% of 147 surveyed brokers agreed that MGAs should be regulated separately from insurers and brokers, while 67% indicate they would be more inclined to work with MGAs if such a framework were introduced.

While there is confirmation in these figures that many brokers feel new regulation should be implemented – do MGAs share this vision?

Positive if proportionate 

Andy Hurrell, founder of Corin Underwriting told Insurance Times that there was a mismatch in MGAs being supervised as intermediaries, without any distinction between their role and that of a broker.

It is this confusion that inevitably “creates ambiguity over who is accountable for product manufacture, fair value and outcomes monitoring under the Consumer Duty” and, therefore, leads to duplication of oversight between MGAs and distributors.

From a market-wide perspective, Hurrell believes that an MGA-specific regulatory framework would support operational clarity, market trust and transparency, as well as enable proportionate oversight.

He said: “A new framework would keep Consumer Duty intact, but apply it through rules built for MGAs, rather than retrofitting broker-style obligations or relying on workarounds via the appointed representatives (AR) regime.

“The FCA’s tightening of the AR framework shows the direction of travel – stronger, more targeted oversight that recognises different business models. A bespoke MGA regime would follow that logic.”

Given MGAs distinct role in underwriting on behalf of capacity partners, and operating under their own governance and pricing expertise, Alison Williams, managing director at Prestige Underwriting also believes that MGA-specific regulation could be a “positive step, if it is proportionate and outcomes-focused”.

She noted that the impact on market trust could be beneficial as visible standards for MGAs could give brokers and policyholders greater confidence in delegated underwriting arrangements, while recognising that MGAs do not carry the same prudential risks as balance-sheet insurers.

However, she also noted that it “must remain alert to regulatory creep”.

She said: “The focus should be on establishing a calibrated, fit-for-purpose framework for MGAs that is practical and proportionate.

“It should also avoid duplicate regulation with carriers and preserve the central role of insurers’ oversight within delegated authorities.”

Ultimately, Williams stresses that the framework “should be clearly aimed at building trust” and “improving customer outcomes” rather than allowing a gradual accumulation of oversight that extends beyond the intended scope and risks burdening MGAs.

Compliance accuracy

As chief executive at wholesale MGA Iprism, operating exclusively with FCA regulated brokers serving UK customers, Ian Lloyd explained that the existing framework treats MGAs as retail intermediaries, which results in duplicated compliance efforts and misapplied obligations.

While Iprism operates as an intermediary, its fiduciary duty lies with its capacity providers and not with end clients. Lloyd stressed that this fundamental difference in responsibility and function means that the current regulatory framework, ”designed primarily for retail brokers, is misaligned” with how MGAs like Iprism operate.

By introducing tailored rules, he noted that redundant compliance work would be eliminated, allowing MGAs to focus on underwriting discipline and product integrity.

He said: “The lack of differentiation between MGAs and brokers has historically created confusion in how rules are interpreted and applied.

“A distinct regulatory identity for MGAs would clarify their obligations and reduce legal ambiguity, enabling regulators to issue guidance that reflects the actual operational model of MGAs which, in turn, would improve compliance accuracy.”

For example, Lloyd considers the FCA’s approach to ICOBS 6A.7 Commission Disclosure in multioccupancy buildings insurance – a clarification that MGAs acting under work‑transfer arrangements for an insurer need not disclose commission earnings – to be a “step in the right direction”, as the regulator acknowledged that it was otherwise confusing to end‑consumers.

He said: “A separate regulatory framework for UK wholesale MGAs would align regulation with reality, reducing inefficiencies and confusion, clarifying roles and responsibilities and improving compliance and governance.

“This isn’t about reducing oversight – it’s about right-sizing it to ensure that regulation supports, rather than hinders, the MGA model.”

‘Be careful what you wish for’

Despite calls for a clarified framework, Managing General Agents’ Association (MGAA) chief executive Mike Keating said that MGAs in favour of this specific regulation should “be careful what you wish for”.

Aiming to revisit the topic with the MGAA membership in Q4 25, Keating explained that one of the key challenges would be the already stretched FCA bandwidth.

When Keating previously brought these regulatory concerns to former FCA director of insurance, Matthew Brewis’, attention, Keating said he was challenged to identify specific areas of regulation clearly aimed at the intermediary community that MGAs should be excluded from, with the regulator prepared to listen.

While the confusing lack of differentiation between brokers and MGAs is a reason for supporting this distinct regulatory framework, Keating also stressed that defining an MGA is another hurdle to it. 

He said: “We’re all aware that there’s a lot of brokers who have delegated authorities and our view, as an association, is that their fiduciary duty is to their end customer, so we’ve got clear red lines.”

However, these lines become blurred when it comes to MGAs, as they sit in much more of a grey area, said Keating.

He said that it was a question of distinguishing whether an entity with a binder and broad delegated authority was truly an MGA, or simply a broker, or whether such an entity’s fiduciary duty lying solely with the insurer means it should be categorised and regulated as an insurer.

“There’s merit to both sides of the argument, but we would need to be, at the heart of this, ensuring exactly what we want to achieve in actually creating a supervisory sector for MGAs,” he concluded.

“I speak to some members and they say they don’t particularly want to be supervised separately, so [it’s important to] be careful what you wish for and go into these things with your eyes open.”